We have recently demonstrated a connection between sensory nerves in the peripheral nervous system (PNS) and the aberrant bone formation known as heterotopic ossification (HO). From these studies bone morphogenetic protein type 2 (BMP2) appears to directly induce expression of neural inflammation, that leads to the expansion and migration of perineurial progenitors. These cells then undergo brown adipogenesis and suppression of neural inflammation, both ablated their expansion and significantly attenuate HO. Also of note, these brown adipocyte-like cells expressed many chondrocyte markers suggesting that they may be undergoing chondrogenesis. These perineurial progenitors also express VEGF A and D within 48 hours of induction of HO, which coincides with the appearance of new flk1+ vessels in the region of new bone formation. Simultaneously, other cells from the endoneurial compartment of the nerve were found to express the osteoblast transcription factor osterix. These cells also express claudin 5, which is present on endoneurial endothelial cells. The data collectively has led us to further hypothesize; that peripheral nerves may directly contribute to HO through the migration of resident progenitors to form both the heterotopic cartilage and bone. Further, the expansion of these cells and their migration may be a product of their co-regulation involving the endothelium within the endoneurium. We have devised three specific aims to test this hypothesis. (1) To determine whether perineurial progenitors are undergoing chondrogenesis. The astrocytic marker GLAST is uniquely expressed on the perineurial progenitors within the nerve, and we will use tamoxifen-regulated (Ert) GLAST-YFP mice to evaluate their lineage fate. We will also induce HO in UCP-DTA mice, where UCP1+ cells are ablated in the presence of diptheria toxin and characterize the formation of cartilage in their absence. (2) To determine if endoneurial endothelial-like progenitors within peripheral nerves undergo osteogenesis during HO. We will further characterize the cells for markers associated with neural progenitors, endothelial cells, and osteoblasts. Additionally, we will use Ert-Wnt1-YFP mice and/or Ert-PDGFR?-YFP mice to trace the tentative neural lineage of these cells, and analyze the resultant heterotopic bone for YFP+ cells. Further, we selectively remove osterix expression in these cells, using an Ert-Wnt1-Cre x Floxed osterix and analyze downstream bone formation. (3) To characterize the regulation of perineurial expansion, vascular sprouting and endoneurial progenitor expansion and migration during HO. We will test whether specific growth factors (such as LIF, PDGF,VEGF, CSF) expression are regulated during the early stages of HO, leading to the dissolution of the tight junctions as well as expansion of perineurial cells followed by brown adipogenesis as well as sprouting of axons and new vessels.